Rearch On Financial Restatement Of *ST Jiadian

Financial report information disclosure of listed companies is the most important way for external information users to know companies' financial situation,thus the quality of information disclosure is especially important.However,financial restatements of listed companies are surprisingly increasing in recent years.Financial restatements indicate the low quality of prior financial reports and weaken investors' confidence,thus making creditability of posterior financial reports questionable.The increasing financial restatements are worthy of attention to improve information disclosure quality of listed companies and to ensure the healthy operation of capital market.Because of the potential severe consequence,this thesis tries to deeply analyze the phenomenon of financial restatements.So this thesis chooses a listed company of the manufacturing industry,*ST Jiadian to do the case study.And this thesis firstly acquaints the general situation of *ST Jiadian's financial restatements,and finds that *ST Jiadian does not adjust its earnings through financial restatements though it frequently restates.Furthermore,this thesis deeply analyzes the motivation,influencing factors,and the consequences of *ST Jiadian's financial restatements.The motivation of *ST Jiadian's financial restatements is simply errors correction and omissions supplement to improve the quality of annual reports disclosure.Meanwhile,combined with the fact of *ST Jiadian's laws and rules violation,*ST Jiadian has the inclination to cover up its financial fraud with the help of financial restatements.The analysis on influencing factors of *ST Jiadian's financial restatements finds that the corporate governance,internal control,and external auditing is poor,providing chances for financial restatements.For corporate governance,*ST Jiadian exists the situation that CEO serves as chairman of the board,independent directors are busy with many jobs in different companies,organizations and institutes,and Harbin Electric Corporation has the dominant control over all shareholders.For internal control,*ST Jiadian lacks in ideal control environment and valid supervision and balance.For external auditing,on the one hand,Da Hua Certified Public Accountants has already continuously served *ST Jiadian for 7years.On the other hand,Da Hua does not effectively identify *ST Jiadian's financial fraud.Da Hua's function of external supervision is not well performed.Besides,because *ST Jiadian's financial restatements do not affect its assets and liabilities and earnings,its financial restatements do not result in serious consequences.More concretely,*ST Jiadian's stock price does not change a lot due to its financial reatatement,and does not cause any litigation or administrative penalty.*ST Jiadian's senior executives frequently leave in several years,wheras it has no strong connection to financial restatements.